For 10 Minutes Of Obama's Speech, He Spoke Directly To Wall Street

For about ten solid minutes during the State of the Union last
night, President Obama was speaking directly to the financial
services industry.

His message was this: No one is jealous of you and we're
not going back to the way things were, so get used to seeing more
of the federal government.

The video is below if you want to watch it, either way we'll
break down the key points for you here:

In Obama's preamble to the point, he says that banks need to
"repay a debt of trust" and that the middle class will only
prosper if the "same rules from top to bottom" are applied to
everyone. That's when he starts talking about regulation in
general (around the 4:00 mark).

Of course, there can be no regulation talk without the
mention of Wall Street, and here's when the industry needs to
start paying attention (4:20):

"I will not go back to the days when Wall Street was
allowed to play by its own set of rules. The new rules we
passed restore what should be any financial system’s core
purpose: Getting funding to entrepreneurs with the best
ideas, and getting loans to responsible families who want to
buy a home, start a business, or send a kid to college."

In short, expect a tough fight from the White House on anything
that smacks of moving away from regulation. And expect
Obama to position himself as the man protecting America from the
financial services industry. The President went on to
chastise the pay-day lenders and non-bank financial institutions
that have
gotten so much flack from Richard Cordray and the new CFPB.

The President started talking about specifics. Regarding
regulation he mentioned new limits on banks' use of customer
deposits and a new requirement for banks to write living wills.
But things really got interesting when Obama started
talking enforcement action (6:08):

We will also establish a Financial Crimes Unit of highly
trained investigators to crack down on large-scale fraud and
protect people’s investments. Some financial firms violate major
anti-fraud laws because there’s no real penalty for being a
repeat offender. That’s bad for consumers, and it’s bad for the
vast majority of bankers and financial service professionals who
do the right thing. So pass legislation that makes the penalties
for fraud count.

The last points the President makes related to Wall Street are on
debt and taxes. Bottom line: His words are a clear
strategy to take ownership of those reforms away from
Republicans. Obama says cutting down the deficit means
"making a choice." The choice, to him, means eliminating what
were supposed to be temporary Bush tax cuts in order to pay down
the deficit and fund education, defense, research etc.

Right now, because of loopholes and shelters in the tax code,
a quarter of all millionaires pay lower tax rates than millions
of middle-class households. Right now, Warren Buffett pays a lower tax rate than his
secretary.

Obama has used that, 'quarter of millionaires' line before, and
according to
The Washington Post's Fact-Checker blog: "The Congressional
Research Service found that among millionaires, the average tax
rate is almost 30 percent. But some 94,500 millionaires — one
quarter — do have a tax rate that is lower than 10.4 million
moderate-income tax payers."

You can probably feel it coming ... this is the point in the
speech where Obama rolls out the Buffett Rule:

Obama goes on to say that this isn't class warfare, it's common
sense. He ends his sit-down with Wall Street with this message —
It isn't that America is jealous of what you've earned, it's that
you didn't do it alone and we're not in this country alone:

We don’t begrudge financial success in this country. We
admire it. When Americans talk about folks like me paying
my fair share of taxes, it’s not because they envy the rich. It’s
because they understand that when I get tax breaks I don’t need
and the country can’t afford, it either adds to the deficit, or
somebody else has to make up the difference – like a
senior on a fixed income; or a student trying to get through
school; or a family trying to make ends meet. That’s not right.
Americans know it’s not right. They know that this
generation’s success is only possible because past generations
felt a responsibility to each other, and to their country’s
future, and they know our way of life will only endure if we feel
that same sense of shared responsibility. That’s how we’ll reduce
our deficit. That’s an America built to last.